How Toms Wins At Retail By Not (Only) Selling Shoes

By Nathan Skid and David Hall |
August 26, 2016 |
2:05

When Blake Mycoskie, founder of Toms Shoes, decided to open a flagship store along a sun-soaked strip of Abbott Kinney Blvd. in Venice, Calif., people thought he was crazy, but not because opening a retail outlet didn’t make sense for the brand.

Mr. Mycoskie only wanted to dedicate half of the square footage to selling shoes; the rest would become a coffee shop with an outdoor space for people to hang out among the merchandise.

The naysayers joked that Toms' flagship store would become a trendy oasis with free Wi-Fi for bored locals to waste away their hours, a dog-friendly recreational center for well-to-do moms and their toddlers or a de-facto office for freelancers with a $3 cup of coffee as the only term of their daily lease.

“One of the big questions everyone had was, aren’t people are going to come hang out and not buy anything?” Mr. Mycoskie said. “We have some people who come here hang all day and don’t buy anything, but they create a vibe, a business and energy that draws more customers into the store.”

The skeptics might have been right about the nature of the customers who congregated there, but they drastically underestimated the flagship store’s ability to sell shoes.

Mr. Mycoskie says the hybrid retail store was profitable within six months. By all accounts, the store is a huge success, prompting the company to open similar outlets in Chicago, New York, Portland and Austin.

But there is something else at play that led to Toms’ brick-and-mortar success.

“The people who maybe come here everyday, over time, it’s like they cant fight the compulsive human desire to buy something,” Mr. Mycoskie said. “So if you are going to have a strong retail presence, you have to give them something different than what you are giving them online.”